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Americans are uninformed on yet another crucial financial matter – the cost of life insurance.

Consumers believe life insurance costs nearly three times the actual price, according to a new LIMRA and LIFE Foundation study. Survey respondents were asked to estimate the annual cost of a 20-year, $250,000, level-term life policy for a healthy 30-year-old consumer. While the actual cost is $150 per year, most respondents estimated the cost at about $400. Younger respondents overestimated by nearly 7 times the actual cost.

If Americans think life insurance is this expensive, how many are buying it?

While nearly 9 in 10 have life insurance, a third of Americans believe they need more coverage. Eighty-three percent of those individuals say the top reason they aren’t purchasing more is because it’s too expensive.

Would an informed population make a life insurance agent’s job easier?

I say, yes, if Americans were better informed about finance and insurance, it would make an advisor’s job easier. Not only would Americans know the true cost of life insurance, they’d also know why it is so important to have adequate coverage, leading more to buy it.

Agents can do their part.

As Financial Literacy Month comes to a close, think about the efforts you’ve made to educate your clients and your community about the importance of insurance and financial planning. If you’ve solely been focusing on educating your clients, then start making an effort to inform your community — it may bring you more clients.

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